Secteur Distribution & Retailing Eurogroup Consulting
A sector facing radical upheaval: the inexorable demise of high-street stores?
For a number of years, operators and observers in the retailing sector have been contributing to, talking about and resisting the irresistible rise of the Internet in French consumer habits. It affects the entire customer itinerary: the search for information (in France, 90%* of consumers prepare their purchases on the Internet), the act of purchase itself and the subsequent sharing of opinion and comments on social networks.
Act II of this surge (whose impacts will probably be even more conspicuous) has emerged very recently with the explosive spread of mobility tools: 3 billion active Internet users worldwide in August 2015 (up 21% compared to the previous year**). Now the Internet is always at the consumer’s fingertips – even in points of sale.
Hence, this is a meeting of two worlds that, although they do not apply the same codes and do not follow the same rules or face the same constraints, still join in the same customer experience: customers wish to be able to purchase online and share news of their purchase in real time with their virtual friends, follow their order on their smartphone, collect it from a store (‘click and collect’) and, if necessary, return their item to any of the retailer’s points of sale.
Redesigning the customer itinerary: what should the response be to consumer 3.0 expectations?
To manage the boom in digitisation, retailing operators must implemente an omnichannel customer itinerary. E/m-commerce has become a channel that complements rather than competes with stores. The main issue is to enable a continuous experience for customers with increasingly complex cross-channel and multi-device itineraries.
In this omnichannel strategy, retailers must precisely determine the role of each channel in the customer 3.0 itinerary and, therefore, question the store's business model. Of course, stores are not doomed to a future of ‘showrooming’ or even extinction! The return of the local shop and the development of new concepts such as drive, pop-up stores, concept stores, etc., are proof of this; retailers are still primarily shopkeepers.
Redesigning the store experience: how can stores convey an enhanced promise of value?
Today, stores can no longer settle for simply selling products. New possibilities are emerging, which have the potential to revive the ‘enchantment’ of points of sale and create a brand-new experience to consumers. High-street retailing must refocus on the individual and human emotions, appeal to their senses and fuel their imagination, while ensuring brand-world consistency between the different channels.
Points of sale must also introduce digital technology to adapt to new 3.0 modes of consumption and provide access to information in the store: deployment of terminals, sales assistants equipped with tablets allowing them to check customer records for the entire retail chain, regardless of the channel.
At the same time, retailers must also work on Social Commerce (management of net-user opinions on the site, deployment of commercial linkages to social networks) to upgrade their website from self-service positioning to choice guidance, as in a high-street store.
Revising organizational models: what are the issues involved in the transformation of operational models?
Beyond the changes perceived by the customer, all these developments result in a need for retailers to question their operational models on several points including: improved stock selection and replenishment, implementation of a cross-channel logistics master plan, modification of headquarters-network organizations, cultural transformation, HR, etc. All this will happen against a background of very tight cost control to tackle increased international competition.
*Source: FEVAD, 2015 key figures
** Source: We are Social, Digital, Social & Mobile Report, August 2015
L'offre Eurogroup Consulting - Distribution & Retailing Eurogroup Consulting
- A flexible retail chain strategy.
- Development of new store formats and concepts.
- Support for the design of an omnichannel strategy and analysis of impacts on departments.
- Steering and conduct of digital projects and digital-transformation programmes (processes, tools).
- Preparation of an in-store digital master plan.
- Framing of a digital portfolio with integrated offers (coupons, loyalty, payment).
- E-commerce site upgrade (cross-channel logic).
- Acceleration of e-business: identification of the ambition and plan of action.
The strategic partnership we have formed with the La Javaness start-up and digital-innovation accelerator brings us the benefit of established expertise in business and organisational transformation in the digital age: Service Design, Big Data, Digital Learning, etc.
- Management of a new customer-relations programme: complaint processing, in-store reception policy, customer-satisfaction measurement system, etc.
- Four-year CRM strategy and roadmap.
- Improvement of customer service: customer promise, in-store strategy and service offer, launch of new services, customer services department, dissemination of a service culture and posture.
- Formalisation of the physical and digital customer itinerary: identification of key moments, related customer expectations and the necessary responses (connected store).
Transformation of networks and operational performance
- Assessment of a network’s organisational maturity to compare points of sale.
- Transformation of stores: changes of brand, of organisation, of information system and of networks.
- Planning of territorial networking and the structuring / segmentation of the network.
- Improvement of the stores’ commercial performance: results analysis, competitor benchmarks, operational alignment (store format / stock selection, opening hours, team design).
Supply Chain, Logistics / Lean Management
- Drawing up of the logistics master plan and network optimisation (national, international, by sector, etc.).
- Optimisation of logistics circuits and flows in a multichannel environment.
- Planning and implementation of tomorrow’s warehouse: size, organisation, layout, addressing, human resources, equipment, construction monitoring.
- Optimisation of warehouse flows (cross-docking, etc.) by product type (dry, fresh and frozen foods and non-food) and organisational impacts.
- Planning of the strategy to shift from direct store flows to warehouse flows: route, sequencing, financial potential and organisational impacts on stores and warehouses.
- Reshaping of the logistics data-management process from end to end: collection to updating.
Team mobilization and support (since the customer experience is inseparable from the staff experience)
- Support for digital transformation implying a cultural and HR transformation within the company: development of organizations and relations between departments, shift to a more cooperative culture, acquisition of new skills, etc.
- Cultural transition ‘from a product culture to a service culture’ (posture, commercial and customer sense).
- LEAN MANAGEMENT Marketing coaching.